Loan No. 00-0000000
PROMISSORY NOTE
$6,000,000.00 Coppell, Texas
October 4, 2004
FOR VALUE RECEIVED, the undersigned XXXXXXXXX HARVARD 1221 XXXX XX, a Texas
limited partnership ("BORROWER"), promises to pay to the order of WASHINGTON
MUTUAL BANK, FA ("LENDER"), at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000, or at such other place as may be designated in writing by Xxxxxx, the
principal sum of SIX MILLION AND NO/100 DOLLARS ($6,000,000.00) or so much
thereof as may from time to time be owing hereunder by reason of advances by
Xxxxxx to or for the benefit or account of Xxxxxxxx, with interest thereon, per
annum, at one or more of the Effective Rates calculated in accordance with the
terms and provisions of the Fixed Rate Agreement attached hereto as EXHIBIT A
and a Fixed Rate Notice in form attached hereto as EXHIBIT B (based on a 360-day
year and charged on the basis of actual days elapsed). All sums owing hereunder
are payable in lawful money of the United States of America, in immediately
available funds.
Interest accrued on this promissory note ("NOTE") shall be due and payable on
the first day of each month commencing on November 1, 2004.
This Note is secured by, among other things, that certain Construction Deed of
Trust, Security Agreement and Fixture Filing ("DEED OF TRUST") dated as of
October 4, 2004, executed by Xxxxxxxx, as grantor, to a trustee for the benefit
of Xxxxxx.
The outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in full on October 4, 2007, unless
extended in accordance with the terms of the Loan Agreement (the "MATURITY
DATE").
Borrower shall, in addition to the payment of interest required pursuant hereto,
commence mandatory monthly principal payments (each, a "MANDATORY PRINCIPAL
PAYMENT") to Lender pursuant to Section 2.7 of the Loan Agreement. No
Administration Fee or Fixed Rate Price Adjustment (each as defined in EXHIBIT A)
shall be due and payable with respect to mandatory principal payments made by
Borrower pursuant to Section 2.7 of the Loan Agreement.
Except as provided in the previous paragraph, Borrower shall have the right to
prepay this Note, in whole or in part, without premium or penalty (subject,
however to the provisions of this Note) only upon delivery to Lender of a
Prepayment Notice in form attached hereto as EXHIBIT C at least ten (10) days
prior to the prepayment date fixed therein for prepayment and upon the payment
of all accrued interest on the prepayment amount (and any interest payable at
the Default Rate and any other sums that may be payable under this Note or the
other Loan Documents) to the prepayment date so fixed. Any prepayment shall: (a)
be in an amount no less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00); (b) shall first be applied against the portion of the outstanding
principal balance of this Note not subject to a Fixed Rate; and (c) shall then
be applied against those Fixed Rate Portions identified by Borrower in the
applicable Prepayment Notice.
Any principal balance reductions, whether mandatory or voluntary, may not be
reborrowed.
If any payment of interest or any Mandatory Principal Payment is not received by
Lender (whether by direct debit or otherwise) on or before the tenth (10th)
calendar day after the date on which it becomes due, Borrower shall pay, at
Xxxxxx's option, a late or collection charge, as liquidated damages, equal to
five percent (5%) of the amount of such unpaid interest payment or Mandatory
Principal Payment.
If: (a) Borrower shall fail to pay when due any sums payable hereunder and such
failure continues for a period of ten (10) days after the date due; OR (b) a
Default (as defined in the Deed of Trust) occurs under the Deed of Trust or
under any obligation secured thereby; THEN Lender may, at its sole option,
declare all sums owing under this Note immediately due and payable; PROVIDED,
HOWEVER, that if any document related to this Note provides for automatic
acceleration of payment of sums owing hereunder, all sums owing hereunder shall
be automatically due and payable in accordance with the terms of that document.
If any attorney is engaged by Xxxxxx to enforce or defend any provision of this
Note or any of the other Loan Documents or as a consequence of any Default, with
or without the filing of any legal action or proceeding, then Borrower shall pay
to Lender immediately upon demand all attorneys' fees and all costs incurred by
Lender in connection therewith, together with interest thereon from the date of
such demand until paid at the rate of interest applicable to the principal
balance owing hereunder as if such unpaid attorneys' fees and costs had been
added to the principal.
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No previous waiver and no failure or delay by Xxxxxx in acting with respect to
the terms of this Note or any of the other Loan Documents shall constitute a
waiver of any breach, default or failure of condition under this Note, the Deed
of Trust or the obligations secured thereby. A waiver of any term of this Note,
the Deed of Trust or of any of the obligations secured thereby must be made in
writing and shall be limited to the express written terms of such waiver. In the
event of any inconsistencies between the terms of this Note and the terms of any
other document related to the loan evidenced by this Note, the terms of this
Note shall prevail.
If this Note is executed by more than one person or entity as Borrower, the
obligations of each such person or entity shall be joint and several. No person
or entity shall be a mere accommodation maker, but each shall be primarily and
directly liable hereunder. If Xxxxxxxx is a partnership, each general partner of
Borrower shall be jointly and severally liable hereunder and each such general
partner hereby waives any requirement of law that in the event of a default
hereunder Xxxxxx exhaust any assets of Borrower before proceedings against such
general partner's assets. Except as otherwise provided in any agreement executed
in connection with this Note, Borrower, and any endorsers and guarantors hereof,
severally waive: presentment, demand, notice of dishonor, notice of default or
delinquency, notice of intention to accelerate, notice of acceleration, notice
of protest and nonpayment, notice of costs, expenses or losses and interest
thereon, notice of late charges and diligence in taking any action to collect
any sums owing under this Note or in proceeding against any of the rights or
interests in or to properties securing payment of this Note. Borrower, and any
endorsers or guarantors hereof, agree that the time for any payments hereunder
may be extended from time to time without notice and consent and agree to the
acceptance of further collateral and/or the release of any existing collateral
for the payment of this Note, all without in any manner affecting their
liability under or with respect to this Note. No extension of time for the
payment of this Note or any installment hereof shall affect the liability of
Borrower under this Note, or any endorser or guarantor hereof, even though
Borrower or such endorser or guarantor is not a party to such agreement.
Time is of the essence with respect to every provision hereof. This Note shall
be construed and enforced in accordance with the laws of the State of Texas,
except to the extent that federal laws preempt the laws of the State of Texas.
Borrower irrevocably submits to the jurisdiction of any state or federal court
sitting in the State of Washington or the State of Texas over any suit, action
or proceeding arising out of or relating to this Note or the Loan evidenced
hereby and any state court sitting in Dallas County, Texas, over any suit,
action or proceeding brought by Xxxxxx to exercise any of its rights under the
Loan Documents or any action brought by Lender to enforce its rights with
respect to the Subject Property and the Collateral (as each such terms are
defined in the Deed of Trust). Borrower irrevocably waives, to the fullest
extent permitted by applicable law, any objection that Borrower may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Borrower
further consents and agrees to service of any summons, complaint or other legal
process in any such suit, action or proceeding by registered or certified U.S.
mail, postage prepaid, to Borrower at the address for notices described in the
Loan Agreement and consents and agrees that such service shall constitute in
every respect valid and effective service (but nothing shall affect the validity
or effectiveness of process served in any other manner permitted by law.
LENDER AND BORROWER HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION: (A) ARISING UNDER THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF; OR
(B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF LENDER
OR BORROWER OR EITHER OF THEM WITH RESPECT TO THIS NOTE, THE OTHER LOAN
DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
LENDER AND BORROWER EACH HEREBY AGREE AND CONSENT THAT EITHER PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS PROVISION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF SUCH PARTIES TO THE WAIVER OF ANY RIGHT THEY MIGHT
OTHERWISE HAVE TO TRIAL BY JURY. This Note is performable in Dallas County,
Texas.
It is expressly stipulated and agreed to be the intent of Borrower and Lender at
all times to comply strictly with the applicable Texas law governing the maximum
rate or amount of interest payable on this Note or the Related Indebtedness (or
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under Texas law), if any. If the applicable law is ever judicially interpreted
so as to render usurious any amount: (a) contracted for, charged, taken,
reserved or received pursuant to this Note, any of the other Loan Documents or
any other communication or writing by or between Borrower and Lender related to
the transaction or transactions that are the subject matter of the Loan
Documents; (b) contracted for, charged or received by reason of Lender's
exercise of the option to accelerate the maturity of this Note and/or the
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Related Indebtedness; or (c) Borrower will have paid or Lender will have
received by reason of any voluntary prepayment by Borrower of this Note and/or
the Related Indebtedness, then it is Borrower's and Xxxxxx's express intent that
all amounts charged in excess of the Maximum Lawful Rate shall be automatically
cancelled, AB INITIO, and all amounts in excess of the Maximum Lawful Rate
theretofore collected by Lender shall be credited on the principal balance of
this Note and/or the Related Indebtedness (or, if this Note and all Related
Indebtedness have been or would thereby be paid in full, refunded to Borrower)
and the provisions of this Note and the other Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder; PROVIDED, HOWEVER, if this
Note has been paid in full before the end of the stated term of this Note, then
Borrower and Lender agree that Lender shall, with reasonable promptness after
Xxxxxx discovers or is advised by Borrower that interest was received in an
amount in excess of the Maximum Lawful Rate, either refund such excess interest
to Borrower and/or credit such excess interest against this Note and/or any
Related Indebtedness then owing by Xxxxxxxx to Lender. Borrower hereby agrees
that as a condition precedent to any claim seeking usury penalties against
Xxxxxx, Xxxxxxxx will provide written notice to Xxxxxx, advising Lender in
reasonable detail of the nature and amount of the violation, and Xxxxxx shall
have sixty (60) days after receipt of such notice in which to correct such usury
violation, if any, by either refunding such excess interest to Borrower or
crediting such excess interest against this Note and/or the Related Indebtedness
then owing by Borrower to Xxxxxx. All sums contracted for, charged or received
by Lender for the use, forbearance or detention of any debt evidenced by this
Note and/or the Related Indebtedness shall, to the extent permitted by
applicable law, be amortized or spread, using the actuarial method, throughout
the stated term of this Note and/or the Related Indebtedness (including any and
all renewal and extension periods) until payment in full so that the rate or
amount of interest on account of this Note and/or the Related Indebtedness does
not exceed the Maximum Lawful Rate from time to time in effect and applicable to
this Note and/or the Related Indebtedness for so long as debt is outstanding. In
no event shall the provisions of Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts and revolving triparty
accounts) apply to this Note and/or the Related Indebtedness. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration. Borrower and Xxxxxx hereby agree that
any and all suits alleging the contracting for, charging or receiving of
usurious interest shall lie in Dallas County, Texas, and each irrevocably waive
the right to venue in any other county.
As used herein, the term "MAXIMUM LAWFUL RATE" shall mean the maximum lawful
rate of interest which may be contracted for, charged, taken, received or
reserved by Lender in accordance with the applicable laws of the State of Texas
(or applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, receive or reserve a greater amount of interest than
under Texas law), taking into account all Charges (as herein defined) made in
connection with the transaction evidenced by this Note and the other Loan
Documents. As used herein, the term "CHARGES" shall mean all fees, charges
and/or any other things of value, if any, contracted for, charged, received,
taken or reserved by Lender in connection with the transactions relating to this
Note and the other Loan Documents, which are treated as interest under
applicable law. As used herein, the term "RELATED INDEBTEDNESS" shall mean any
and all debt paid or payable by Borrower to Lender pursuant to the Loan
Documents or any other communication or writing by or between Borrower and
Lender related to the transaction or transactions that are the subject matter of
the Loan Documents, except such debt which has been paid or is payable by
Borrower to Lender under this Note.
To the extent that Xxxxxx is relying on Chapter 303 of the Texas Finance Code to
determine the Maximum Lawful Rate payable on this Note and/or the Related
Indebtedness, Xxxxxx will utilize the weekly ceiling from time to time in effect
as provided in such Chapter 303, as amended. To the extent United States federal
law permits Lender to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law, Lender will rely on United States
federal law instead of such Chapter 303 for the purpose of determining the
Maximum Lawful Rate. Additionally, to the extent permitted by applicable law now
or hereafter in effect, Lender may, at its option and from time to time, utilize
any other method of establishing the Maximum Lawful Rate under such Chapter 303
or under other applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect.
Notwithstanding anything in this Note to the contrary, if at any time: (a)
interest at the Effective Rate; and (b) the Charges computed over the full term
of this Note, exceed the Maximum Lawful Rate, then the rate of interest payable
hereunder, together with all Charges, shall be limited to the Maximum Lawful
Rate; PROVIDED, HOWEVER, that any subsequent reduction in the Effective Rate
shall not cause a reduction of the rate of interest payable hereunder below the
Maximum Lawful Rate until the total amount of interest earned hereunder,
together with all Charges, equals the total amount of interest which would have
accrued at the Effective Rate if such interest rate had at all times been in
effect. Changes in the Effective Rate resulting from a change in the Prime Rate
shall be subject to the provisions of this paragraph.
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All notices or other communications required or permitted to be given pursuant
to this Note shall be given to Borrower or Lender at the address and in the
manner provided for in the Loan Agreement (as defined in the Deed of Trust).
EXHIBITS A, B AND C are attached hereto and incorporated herein for all
purposes.
THIS NOTE AND ALL THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT OF
BORROWER AND LENDER AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF XXXXXXXX AND XXXXXX. THERE ARE NO ORAL AGREEMENTS BETWEEN BORROWER AND
LENDER. The provisions of this Note and the other Loan Documents may be amended
or revised only by an instrument in writing signed by the Borrower and Xxxxxx.
"BORROWER"
XXXXXXXXX HARVARD 1221 XXXX XX,
a Texas limited partnership
By Xxxxxxxxx Harvard 1221 Xxxx XX, LLC,
a Texas limited liability company,
its General Partner
By:
------------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Secretary
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EXHIBIT A
Loan No. 00-0000000
FIXED RATE AGREEMENT
EXHIBIT A to Promissory Note ("NOTE"), dated October 4, 2004, made by BEHRINGER
HARVARD 1221 XXXX XX, a Texas limited partnership, as Borrower, to the order of
WASHINGTON MUTUAL BANK, FA, as Lender.
R E C I T A L S
Borrower has requested and Lender has agreed to provide a fixed rate option as a
basis for calculating the effective rate of interest on certain amounts owing
under this Note. Borrower acknowledges the following: (a) it understands the
process of exercising the fixed rate option as provided herein; (b) amounts
owing under this Note may bear interest at different rates and for different
time periods; and (c) absent the terms and conditions hereof, it would be
extremely difficult to calculate Xxxxxx's additional costs, expenses and damages
in the event of a Default or prepayment by Borrower hereunder. Given the above,
Xxxxxxxx agrees that the provisions herein (including, without limitation, the
Fixed Rate Price Adjustment defined below) provide for a reasonable and fair
method for Lender to recover its additional costs, expenses and damages in the
Event of Default or prepayment by Borrower.
1. RATES AND TERMS DEFINED. Various rates and terms not otherwise defined
herein are defined and described as follows:
"ADMINISTRATION FEE" shall be FIVE HUNDRED AND NO/100THS DOLLARS
($500.00) for each prepayment made pursuant to a Prepayment Notice.
"APPLICABLE LIBOR RATE" is the rate of interest per annum equal to the
sum of: (a) the LIBOR Rate; PLUS (b) one and one-half percent (1.50%);
PROVIDED, HOWEVER, in no event shall the Applicable LIBOR Rate exceed
the Maximum Lawful Rate.
"BUSINESS DAY(S)" means a day of the week (but not a Saturday, Sunday or
holiday) on which the offices of Lender are open to the public for
carrying on substantially all of Lender's business functions.
"DEFAULT RATE" is a rate of interest per annum five percent (5%) in
excess of the applicable Effective Rate in effect from time to time.
"EFFECTIVE RATE" has the meaning ascribed to it in, and is calculated
pursuant to, Section 2 below of this EXHIBIT A.
"FIXED RATE" is the Applicable LIBOR Rate as accepted by Borrower as an
Effective Rate for a particular Fixed Rate Period and Fixed Rate
Portion.
"FIXED RATE COMMENCEMENT DATE" means the date upon which the Fixed Rate
Period commences.
"FIXED RATE NOTICE" is a written notice in form attached to this Note as
EXHIBIT B which confirms the Fixed Rate for a particular Fixed Rate
Period and the Fixed Rate Portion.
"FIXED RATE PERIOD" is the period or periods of one (1) month, two (2)
months, three (3) months or six (6) months, which periods are selected
by Borrower and confirmed by Lender in the Fixed Rate Notice; PROVIDED,
HOWEVER, that no Fixed Rate Period shall extend beyond the Maturity
Date.
"FIXED RATE PORTION" is the portion or portions of the principal balance
of this Note which Borrower selects or is deemed to have selected
pursuant to SECTIONS 3 AND 4 of this Fixed Rate Agreement to have
subject to a Fixed Rate. In the event Borrower is subject to a principal
amortization schedule under the terms and conditions of the Loan
Documents, the Fixed Rate Portion shall in no event exceed the maximum
outstanding principal balance which will be permissible on the LAST day
of the Fixed Rate Period selected.
"LIBOR RATE" is the rate of interest per annum, rounded upward, if
necessary, to the nearest 1/1000 of 1%, at which deposits in the lawful
currency of the United States of America are offered by the major London
clearing banks, as reported on page 5 of the Telerate screen (or such
other service selected from time to time by Lender and determined by
Lender to be comparable to Telerate, which other service may include
Reuters Monitor Money Rates Service or The Bloomberg), in the
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London Interbank Offered Rate market for deposits in U.S. Dollars at
approximately 11:00 a.m. London, England, time two (2) Business Days
prior to a Fixed Rate Commencement Date or a Price Adjustment Date, as
appropriate, for purposes of calculating effective rates of interest for
loans or obligations making reference thereto for an amount
approximately equal to a Fixed Rate Portion and for a period of time
approximately equal to a Fixed Rate Period or the time remaining in a
Fixed Rate Period after a Price Adjustment Date, as appropriate. The
LIBOR Rate determined by Lender with respect to a particular Fixed Rate
Period shall be fixed at such rate for the duration of the Fixed Rate
Period.
"LOAN AGREEMENT" is that certain Loan Agreement dated as of October 4,
2004, between Xxxxxxxx and Xxxxxx.
"LOAN DOCUMENTS" are the documents defined as such in the Loan
Agreement.
"PRIME RATE" is the prime rate of interest announced or published by THE
WALL STREET JOURNAL (Southwest Edition) in the "MONEY RATES" column of
the most recent issue thereof. If the prime rate as so published changes
from time to time after the date hereof, the Prime Rate shall be
automatically increased or decreased, as the case may be, without notice
to Borrower, as of the effective time of each change in such prime rate.
In the event THE WALL STREET JOURNAL (Southwest Edition), or any
successor publisher, does not then or ceases to publish such prime rate,
the prime rate shall thereafter be determined by such alternate method
as may be reasonably selected by Xxxxxx. In no event shall the Prime
Rate exceed the Maximum Lawful Rate.
"REGULATORY COSTS" are, collectively, future, supplemental, emergency or
other changes in Reserve Percentages, assessment rates imposed by the
FDIC, or similar requirements or costs imposed by any domestic or
foreign governmental authority and related in any manner to a Fixed
Rate.
"RESERVE PERCENTAGE" is at any time the percentage announced within
Lender as the reserve percentage under Regulation D for loans and
obligations making reference to an Applicable LIBOR Rate for a Fixed
Rate Period or time remaining in a Fixed Rate Period on a Price
Adjustment Date, as appropriate. The Reserve Percentage shall be based
on Regulation D or other regulations from time to time in effect
concerning reserves for Eurocurrency Liabilities as defined in
Regulation D from related institutions as though Lender were in a net
borrowing position, as promulgated by the Board of Governors of the
Federal Reserve System, or its successor.
"TAXES" are, collectively, all withholdings, interest equalization
taxes, stamp taxes or other taxes (except income and franchise taxes)
imposed by any domestic or foreign governmental authority and related in
any manner to a Fixed Rate.
2. EFFECTIVE RATE. The "Effective Rate" upon which interest shall be
calculated for PURPOSES OF this Note shall be one or more of the
following:
2.1 Provided no Default, breach or failure of condition exists under the
Loan Agreement or any of the Loan Documents described therein (this Note
is one of the Loan Documents):
(a) for those portions of the principal balance of this Note which
are not Fixed Rate Portions, the Effective Rate shall be the
lesser of the Prime Rate or the Maximum Lawful Rate (as defined
in the Note); and
(b) for those portions of the principal balance of this Note which
are Fixed Rate Portions, the Effective Rate for the Fixed Rate
Period thereof shall be the lesser of the Fixed Rate selected by
Borrower and set in accordance with the provisions hereof or the
Maximum Lawful Rate (as defined in the Note), PROVIDED, HOWEVER,
if any of the transactions necessary for the calculation of
interest at any Fixed Rate requested or selected by Borrower
should be or become prohibited or unavailable to Lender, or, if
in Lender's reasonable judgment, it is not possible or practical
for Lender to set a Fixed Rate for a Fixed Rate Portion and
Fixed Rate Period as requested or selected by Borrower, the
Effective Rate for such Fixed Rate Portion shall remain at or
revert to the Prime Rate.
2.2 During such time as a Default, breach or failure of condition exists
under the Loan Agreement or any of the Loan Documents or from and after
the date on which all sums owing under this Note become due and payable
by acceleration or otherwise or from and after the date on which the
property encumbered by the Deed of Trust or any portion thereof or
interest therein, is sold, transferred, mortgaged, assigned or
encumbered, whether voluntarily or
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involuntarily, or by operation of law or otherwise, without Xxxxxx's
prior written consent (whether or not the sums owing under this Note
become due and payable by acceleration) or from and after the Maturity
Date, then at the option of Lender, the interest rate applicable to the
then-outstanding principal balance of this Note shall be the lesser of
the Default Rate or the Maximum Lawful Rate (as defined in the Note).
2.3 Notwithstanding anything herein to the contrary, if at any time: (a) the
Effective Rate, together with (b) all Charges, if any, computed over the
full term of this Note, exceed the Maximum Lawful Rate, the rate of
interest payable hereunder, together with all Charges, shall be limited
to the Maximum Lawful Rate; PROVIDED, HOWEVER, that any subsequent
reduction in the Effective Rate shall not cause a reduction of the rate
of interest payable hereunder below the Maximum Lawful Rate until the
total amount of interest earned hereunder, together with all Charges,
equals the total amount of interest which would have accrued at the
Effective Rate if such interest rate had at all times been in effect.
3. SELECTION OF FIXED RATE. Provided no Default, breach or failure of
condition exists under the Loan Documents, or would exist with passage
of time or notice or both, Borrower, at its option and upon satisfaction
of the conditions set forth herein, may request a Fixed Rate as the
Effective Rate for calculating interest on the portion of the unpaid
principal balance and for the period selected in accordance with and
subject to the following procedures and conditions:
3.1 Five (5) Business Days prior to any Fixed Rate Commencement
Date, Borrower shall deliver to 000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000 (Facsimile No. 469/549-5604), Attention:
Billing and ARMs Department, or such other addresses as Lender
may from time to time designate, an original or facsimile Fixed
Rate Notice no later than 11:00 A.M. (Texas time), for each
Fixed Rate Portion. ANY FIXED RATE NOTICE PURSUANT TO THIS
SECTION 3 IS IRREVOCABLE. Xxxxxx is authorized to rely upon the
telephonic request and acceptance of Xxxx Xxxxxx as Xxxxxxxx's
duly authorized agent, or such additional authorized agent as
Borrower may from time to time designate in writing to Lender.
Xxxxxxxx's telephonic notices, requests and acceptances shall be
directed to such officers of Xxxxxx as Lender may from time to
time designate.
3.2 Borrower may elect: (a) a Fixed Rate for the initial
disbursement of proceeds hereunder; (b) to convert Prime Rate
advances to a Fixed Rate Portion; or (c) to convert a matured
Fixed Rate Portion into a new Fixed Rate Portion. The conversion
of a matured Fixed Rate Portion back to a Prime Rate or to a new
Fixed Rate Portion shall occur on the last Business Day of the
Fixed Rate Period relating to such Fixed Rate Portion. Each
Fixed Rate Notice shall specify: (x) the amount of the Fixed
Rate Portion; (y) the Fixed Rate Period; and (z) the Fixed Rate
Commencement Date.
3.3 Upon receipt of a Fixed Rate Notice in the proper form
requesting a Fixed Rate Portion advance under SUBSECTIONS 3.1
AND 3.2 above, Lender shall determine the Fixed Rate applicable
to the Fixed Rate Period for such Fixed Rate Portion. Each
determination by Lender of the Fixed Rate shall be conclusive
and binding upon Lender and Borrower in the absence of manifest
error. Lender shall deliver to Borrower (by facsimile) an
acknowledgment of receipt and confirmation of the Fixed Rate
Notice; PROVIDED, HOWEVER, that failure to provide such
acknowledgment of receipt and confirmation of the Fixed Rate
Notice to Borrower shall not affect the validity of such rate.
3.4 If Borrower does not elect a Fixed Rate for the initial
disbursement of proceeds hereunder or make a timely election to
convert all or a portion of a matured Fixed Rate Portion into a
new Fixed Rate Portion in accordance with SUBSECTION 3.2 above,
such initial disbursement and Fixed Rate Portion shall be
automatically established as or converted to a Fixed Rate
Portion for a Fixed Rate Period of one (1) month upon the
expiration of the Fixed Rate Period applicable to such Fixed
Rate Portion.
4. FIXED RATE NOTICE. Borrower's selection of a Fixed Rate shall be
delivered to Lender in form attached to this Note as EXHIBIT B. Lender
shall confirm and deliver to Borrower acceptance of such Fixed Rate
Notice via facsimile. Xxxxxx's failure to deliver the Fixed Rate Notice
shall not release Borrower from Borrower's obligation to pay interest at
the Effective Rate pursuant to the terms hereof.
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5. LIMITATIONS ON RIGHT TO FIX RATE. Borrower shall HAVE no more than FIVE
(5) FIXED RATE PORTIONS IN EFFECT at any one time during the term
hereof.
6. TAXES, REGULATORY COSTS AND RESERVE PERCENTAGES. Upon Xxxxxx's demand,
Borrower shall pay to Lender, in addition to all other amounts which may
be, or become, due and payable under this Note and Loan Documents, any
and all Taxes and Regulatory Costs, to the extent they are not
internalized by calculation of a Fixed Rate. Lender shall give Borrower
notice of any Taxes and Regulatory Costs as soon as practicable after
their occurrence, but Borrower shall be liable for any Taxes and
Regulatory Costs regardless of whether or when notice is so given.
7. FIXED RATE PRICE ADJUSTMENT. Borrower acknowledges that prepayment or
acceleration of a Fixed Rate Portion during a Fixed Rate Period shall
result in Lender's incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities.
Therefore, on the date a Fixed Rate Portion is prepaid or the date all
sums payable hereunder become due and payable, by acceleration or
otherwise ("PRICE ADJUSTMENT DATE"), Borrower will pay Lender (in
addition to all other sums then owing to Lender) AN ADMINISTRATION FEE
PLUS an amount ("FIXED RATE PRICE ADJUSTMENT") equal to the then-present
value of: (a) the amount of interest that would have accrued on the
Fixed Rate Portion for the remainder of the Fixed Rate Period at the
Fixed Rate set on the Fixed Rate Commencement Date; LESS (b) the amount
of interest that would accrue on the same Fixed Rate Portion for the
same period if the Fixed Rate were set on the Price Adjustment Date at
the Applicable LIBOR Rate in effect on the Price Adjustment Date. The
present value shall be calculated by using as a discount rate the LIBOR
Rate quoted on the Price Adjustment Date.
8. PURCHASE, SALE AND MATCHING OF FUNDS. Borrower understands, agrees and
acknowledges the following: (a) Lender has no obligation to purchase,
sell and/or match funds in connection with the use of a LIBOR Rate as a
basis for calculating a Fixed Rate or Fixed Rate Price Adjustment; (b) a
LIBOR Rate is used merely as a reference in determining a Fixed Rate and
Fixed Rate Price Adjustment; and (c) Borrower has accepted a LIBOR Rate
as a reasonable and fair basis for calculating a Fixed Rate and a Fixed
Rate Price Adjustment. Xxxxxxxx further agrees to pay the Fixed Rate
Price Adjustment, Taxes and Regulatory Costs, if any, whether or not
Lender elects to purchase, sell and/or match funds.
9. MISCELLANEOUS. Xxxxxxxx confirms that Xxxxxx's agreement to make the
loan evidenced by this Note at the interest rates and on the other terms
set forth herein and in the other Loan Documents constitutes adequate
and valuable consideration, given individual weight by Borrower for this
agreement. As used in this EXHIBIT A, the plural shall mean the singular
and the singular shall mean the plural as the context requires.
Addresses for the Fixed Rate Notice shall be the same as those for
notices under the Loan Agreement executed in connection with this Note.
8
EXHIBIT A
This Agreement is executed concurrently with and as part of the Note referred to
and described first above.
"BORROWER"
XXXXXXXXX HARVARD 1221 XXXX XX,
a Texas limited partnership
By Xxxxxxxxx Harvard 1221 Xxxx XX, LLC,
a Texas limited liability company,
its General Partner
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Secretary
9
EXHIBIT B
Loan No. 00-0000000
____ 1
Initials 112023_5/(89370/006)
TODAY'S DATE: LOAN MATURITY DATE: October 4, 2007
------------------------------------------ -----------------------------------
TO: WASHINGTON MUTUAL BANK, FA
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
FAX NO. (000) 000-0000
ATTN: Billing and ARMs Department
====================================================================================================================================
FIXED RATE NOTICE
LOAN #: 00-0000000 BORROWER NAME: XXXXXXXXX XXXXXXX 1221 XXXX XX
------------------ ----------------------------------------------------------------------------
RATE SET DATE: FIXED RATE COMMENCEMENT DATE:
------------------ -------------------------
FIXED RATE PERIOD (TERM): (i.e. 1, 2, 3 or 6 months as allowed per Note)
----------------------------------
INITIAL DISBURSEMENT AMOUNT
---------------------
FIXED RATE PORTION EXPIRING
ON:
---------------------
1. AMOUNT ROLLING OVER $
--------------------
2. ADD: AMT TRANSFERRED FROM PRIME RATE
PORTION $
--------------------
3. ADD: AMT TRANSFERRED FROM OTHER FIXED
RATE PORTION $
--------------------
4. ADD: AMT TRANSFERRED FROM OTHER FIXED
RATE PORTION $
--------------------
5. LESS: AMT TRANSFERRED TO PRIME RATE
PORTION $
--------------------
TOTAL FIXED RATE PORTION: $
--------------------
Borrower confirms, represents and warrants to Lender: (a) that this selection of a Fixed Rate is subject to the
terms and conditions of the Note, Fixed Rate Agreement and Loan Documents (as applicable); and (b) that terms,
words and phrases used, but not defined in this Notice have the meanings attributed thereto in the Note, Fixed
Rate Agreement and Loan Documents (as applicable); and (c) that no breach, failure of condition or Default has
occurred or exists, or would exist after notice or passage of time or both, under the Note or the Loan Documents.
REQUESTED BY (as allowed per Note): TELEPHONE #:( )
---------------------------------- -------------------------
PRINT NAME: FAX #:( )
--------------------------------------------------------------------- -------------------------
====================================================================================================================================
WASHINGTON MUTUAL BANK ACKNOWLEDGMENT OF RECEIPT AND CONFIRMATION
INDEX: LIBOR RATE: % + 1.50% = %
-------------------- ------------------- --------------------------- ---------------------------
Quote Spread Applicable LIBOR Rate
FIXED RATE EXPIRATION DATE: _________________________
REQUEST APPROVED BY: DATE:
----------------------------------------------- -----------------------------------
CONFIRMATION FAXED TO CUSTOMER BY: DATE: TIME:
------------------------- -------------- ------------
EXHIBIT C
Loan No. 00-0000000
TODAY'S DATE: LOAN MATURITY DATE: October 4, 2007
------------------------------------------ ---------------------------------------
TO: WASHINGTON MUTUAL BANK, FA
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
FAX NO. (000) 000-0000
ATTN: Billing and ARMs Department
====================================================================================================================================
PREPAYMENT NOTICE
LOAN #: 00-0000000 BORROWER NAME: XXXXXXXXX XXXXXXX 1221 XXXX XX
------------------ ----------------------------------------------------------------------------
PREPAYMENT DATE: PREPAYMENT
AMOUNT: $
------------------ -------------------------
1. PORTION OF PREPAYMENT APPLICABLE TO
PRIME RATE PORTION
$
--------------------
2. ADD: PORTION TO BE APPLIED AGAINST
___________ FIXED RATE PORTION
$
--------------------
3. ADD: PORTION TO BE APPLIED AGAINST
___________ FIXED RATE PORTION
$
--------------------
4. ADD: PORTION TO BE APPLIED AGAINST
___________ FIXED RATE PORTION
$
--------------------
5. ADD: PORTION TO BE APPLIED AGAINST
___________ FIXED RATE PORTION
$
--------------------
6. ADD: PORTION TO BE APPLIED AGAINST
___________ FIXED RATE PORTION
$
--------------------
TOTAL PREPAYMENT $
--------------------
Borrower acknowledges and agrees that, once submitted to Xxxxxx, the Prepayment Notice is irrevocable and Borrower shall pay
the Prepayment Amount to Lender on the Prepayment Date.
NOTICE FROM: TELEPHONE #:( )
------------------------------------------------------------------- ---------------------------
PRINT NAME: FAX #:( )
------------------------------------------------------------------- ---------------------------
====================================================================================================================================
WASHINGTON MUTUAL BANK ACKNOWLEDGMENT OF RECEIPT AND CONFIRMATION
PREPAYMENT DATE: ______________________ PREPAYMENT AMOUNT: ______________________
CONFIRMATION FAXED TO CUSTOMER BY: DATE: TIME:
------------------------- -------------- -------------
